March 17, 2008 / 10:47 PM / in 10 years

UPDATE 1-Canadian Oil Sands cuts Syncrude output target

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CALGARY, Alberta, March 17 (Reuters) - Canadian Oil Sands Trust COS_u.TO, which owns the biggest share of the Syncrude Canada oil sands venture, has cut its first-quarter output forecast by 17 percent to account for production problems in January and February, it said on Monday.

Canadian Oil Sands said it expects output at the sprawling northern Alberta facility to be 24 million barrels for the period, down from the previous target of 29 million.

Output is expected to average 265,000 barrels a day in the current quarter, down from the operation’s capacity of more than 350,000 a day, said the trust, which owns 37 percent of Syncrude.

It also cut its full-year outlook to 108 million barrels from 115 million. That equates to about 296,000 barrels a day.

Syncrude, the world’s largest producer of synthetic crude, suspended production in late January when instruments froze up in -40 Fahrenheit (-40 Celsius) weather. Output resumed slowly.

The trust said it is now gauging the impact of the shortfall on operating costs and capital spending, and expects to release the results of the assessment in late April.

Meanwhile, Syncrude said it is still planning turnarounds for two of its coking units, one in April and another later in the year, further hampering production. The units process extra-heavy crude from the oil sands into refinery-ready light oil.

The trust’s partners include Imperial Oil Ltd (IMO.TO), Petro-Canada PCA.TO, ConocoPhillips (COP.N), Nexen Inc NXY.TO, Nippon Oil Corp 5001.T unit Mocal Energy Ltd and Murphy Oil Corp (MUR.N). (Reporting by Jeffrey Jones; editing by Rob Wilson)

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